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Bajaj Auto has posted a 40 per cent increase in net profit to Rs 667 crore for the third quarter ended December 31, 2010. The good performance was on the back of strong sales of higher-margin premium motorcycles such as the Pulsar and Discover ranges.
Net sales also rose 27 per cent in the three-month period to Rs 4,028 crore, while total unit sales for the company increased 17 per cent to 9.46 lakh units.
“The quarter witnessed an all round increase in input cost. In this challenging environment, the company's focus on high-end motorcycles enabled it to maintain record high margins in excess of 20 per cent. The high-end motorcycles now contribute over 70 per cent of company's total motorcycle sales,” the company said.
Motorcycle sales in the quarter rose 18 per cent to 8.38 lakh units, with a 23 per cent (5.98 lakh units) increase in domestic sales and 7 per cent (2.39 lakh units) rise in exports. With a market share of 50 per cent in the sports category, ‘Pulsar' recorded the highest sales at 2.62 lakh units, while ‘Discover' sold 3.27 lakh units.
Commercial vehicle sales
Commercial vehicle (CV) sales rose 13 per cent to 1.08 lakh units overall, even as the total exports rose 8 per cent to 2.96 lakh units.
“Demand for CVs remains strong. Currently, the company is facing capacity constraints in its four-stroke range. Demand from overseas markets is robust. The company targets record exports of $1 billion for the year,” it said.
Mr Karan Datt, an analyst with Kotak Securities, said Bajaj Auto's third quarter results were broadly in line with the expectations and there were no major surprises.
“The company continued to impress on the margin front despite firm commodity prices because of sequential fall in employee cost and other expenditure. We expect the company to close the current financial year with volumes of 3.86 million and EBITDA margin of close to 20 per cent,” he said.
Bajaj Auto, which had a 31 per cent share of the market in the quarter, saw its shares close up nearly two percent on the BSE, at Rs 1,319.85 on Wednesday.
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